How to Reduce Debt Quickly

financially savvy kids

By K. Bridget Schneider, CFP®, CRPC®
reduce debt quickly

Are you struggling to keep up on paying your debts?  Do you have so many payments that there is nothing left over to put towards your future?  If you are very deep in debt do you feel panicked or depressed?

Debt can make you question your goals and dreams for the future.  You might even listen to the wrong people or make uninformed choices as you desperately try to improve your situation.  But I have seen even some of the wealthiest people make bad money decisions.  So, stop beating yourself up, and let’s look at how you can reduce debt quickly.

Make a Budget

You can try to ignore it, but the simple truth is, you’ll never get ahead if you’re spending more money than you make.  If you want to become debt-free, you need to make a budget to decide where every dollar will go before it’s spent.  This is one of the best tips to reduce debt quickly. And despite what you might think, living on a budget doesn’t put an end to all your fun. 

A properly drafted budget gives you the freedom to spend, but it also provides peace of mind to know exactly where your hard-earned money is going.  A budget might be a little difficult to follow at first, but don’t give up!  It can take several months to get into a regular rhythm with a budget.  It’s worth the effort, and it will help keep you on track as you work toward paying off your debt.  

Pick a Payoff Method

Another way to reduce debt quickly is to choose one of these two popular methods for paying off your debt and stick with it.  These methods are typically a better choice than debt settlement, which we mentioned in a previous blog.

Snowball Method to Pay Off Debt

The snowball method considers the amount owed on each debt rather than the payment amount or interest rate.  You start by making a list of your debts, ranking them in order from the lowest balance to the highest balance.  You’ll make minimum payments on all of these debts except the one with the lowest balance.  On that one, you need to pay as much over the minimum amount as you can scrape together.  When the first debt is paid in full, you add the payment amount to the minimum payment of the debt with the next highest balance on your list.  Each time you clear one of the debts from the list, the payment amount you were making is added to the next lowest balance – like a rolling snowball!  This process continues until all your debts are gone.  

Avalanche Method to Pay Off Debt

Unlike the snowball method, the avalanche method focuses on paying off the highest interest rate debt first rather than the lowest balance.  That way you are lowering the total interest paid so more of your money goes toward paying down debt earlier – like an avalanche!  Begin by ranking your debts in order from highest interest rate down to lowest.  You’ll make the minimum monthly payment on each of these except the one with the highest interest rate.  On that one, you’ll need to focus on paying as much as you can over the minimum payment amount.  When that debt is paid off, you’ll add the amount you were paying to the minimum payment on the next highest interest rate debt and so on.

Make Extra Cash

In addition to creating a budget and following one of the two debt payoff methods above, you may need to find ways to bring in extra cash.  You might consider selling your gently used, but unwanted items such as clothing, furniture, or gadgets. 

Taking a part-time job could be another option.  Perhaps you could drive for Uber or Lyft.  Another popular option is to work as a shopper or delivery person for companies like Instacart or DoorDash.  All of these positions offer some flexibility with your schedule.  Or, if your current job allows you to pick up overtime hours or work toward a promotion, that can be another way to increase income to your household.


Being in debt can be overwhelming, especially if your income is limited, but it is possible to reduce debt quickly.  You only need to make some choices about your financial picture.  Would you rather cut back a bit now or live with the stress of debt for a lifetime?  It’s time to take control of your finances, crush your debt, and start living for your future instead of your past.  You can do this!  

Whether you’re just starting to pay off your debt or you’ve been working on it for a few years, you may find it helpful to speak with a Certified Financial Planner™ professional for additional advice about your situation.  Be sure to visit our website today or call us at 217-605-8130.  At Connections Financial Advisors, our mission is to help you make more informed decisions to better your financial position and reduce your financial stress.  I encourage you to think twice before taking on any new debt at this time. 

Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual, nor intended to be a substitute for specific individualized tax or legal advice.

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